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From PAPSS to Buna: How Afro-Arab payment rails are redrawing the regional finance map

28 October 2026 Comments (0) Business

How PAPSS and Buna are building Africa-Arab payment infrastructure

Two regional payment platforms are building the rails for a new financial geography connecting Africa and the Arab world. On the African side, the Pan-African Payment and Settlement System (PAPSS), launched by Afreximbank, enables cross-border transactions in local African currencies, bypassing the correspondent banking routes that typically run through New York or London. On the Arab side, the Buna platform, operated by the Arab Monetary Fund, functions as a multi-currency payment and settlement system designed to serve Arab and neighboring markets.

Each platform was built independently to address similar structural problems: high transaction costs, slow settlement, and dependence on external financial infrastructure. But as trade and remittance flows between Africa and the Gulf deepen, the case for connecting these two systems grows more pressing. The question is no longer whether integration is desirable, but how fast institutional momentum can build.

Remittance costs and the Africa-Gulf integration case

The economic stakes are substantial. According to World Bank data, remittance inflows to Sub-Saharan Africa amount to tens of billions of dollars each year. Egypt alone, one of the region’s largest recipients, has historically received tens of billions in annual remittances, with a major share originating from workers in Saudi Arabia, the UAE, and Kuwait. A significant portion of these flows still travels through costly legacy channels.

The World Bank has documented that Sub-Saharan Africa consistently pays the highest remittance transaction costs of any global region, often exceeding 7 to 8 percent per transaction on certain corridors. Reducing those costs by even a few percentage points would translate into hundreds of millions of dollars annually returned to African households rather than absorbed by intermediaries. For migrant workers in the Gulf, many employed in construction and domestic services, the difference registers directly on monthly budgets.

Cross-border trade compounds this dynamic. Analyses from UNCTAD and regional development banks have consistently shown that GCC-Africa trade volumes grew throughout the decade preceding 2024, spanning food imports, energy, construction materials, and manufactured goods. As volumes rise, businesses on both sides increasingly demand faster, cheaper settlement options. The current architecture, which typically routes payments through third-country correspondent banks, adds both cost and time that erodes competitiveness.

Mobile money growth and the financial sovereignty case for integration

The convergence of technology trends on both sides of the corridor creates a distinctive opening. African mobile money ecosystems have reached real scale: Kenya and Ghana, among others, report that a majority of adults now hold mobile money accounts, with transaction volumes in some markets representing a significant share of GDP. Across the Gulf, digital payment adoption has accelerated under national payment modernization programs, and consumer expectations for speed and frictionless access have risen sharply.

This technical maturity shifts the conversation about Afro-Arab payment integration from aspiration toward implementation. PAPSS gives African central banks a mechanism to settle transactions in local currencies, reducing exposure to dollar fluctuations and the geopolitical risks tied to Western-controlled clearinghouses. Buna offers Arab economies an analogous layer of sovereignty over regional settlement. Connecting the two would extend this logic to cross-regional trade: a Senegalese exporter and an Emirati importer could, in principle, settle in their own currencies without routing through a third-country bank.

The sovereignty argument resonates in both regions for reasons that extend beyond fintech. Discussions about reducing dollar dependence in trade, reforming the global financial architecture, and building regional alternatives to correspondent banking have been active in both African and Arab policy circles. Payments integration sits at the practical core of these ambitions, giving technical projects a political weight that helps sustain institutional support.

Private fintech companies in Africa-Gulf payment corridors

While institutional platforms develop their frameworks, private fintech companies are already operating in the corridors that PAPSS and Buna aim to serve. Startups across West and East Africa facilitate remittances from the Gulf, competing on speed, mobile-first design, and lower fees compared to traditional money transfer operators. Middle Eastern payment gateways have begun targeting African merchant traffic as e-commerce volumes expand.

These private actors have a dual relationship with regional institutional rails. On one hand, platforms like PAPSS can provide settlement infrastructure that lowers the cost and complexity of running cross-border payment services, potentially enabling smaller fintechs to compete more effectively against incumbents. On the other hand, connecting private and institutional systems requires regulatory alignment. Central banks in both regions must establish frameworks governing how licensed fintechs access regional settlement layers, and how consumer protections apply across jurisdictions.

For entrepreneurs building in this space, the regulatory landscape matters at least as much as the technology stack. Founders of remittance platforms serving Gulf-to-Africa corridors consistently cite licensing complexity and currency controls as the primary constraints on growth, often more limiting than technical challenges. Progress on harmonized regulatory frameworks between African and Arab central banks would therefore have direct and immediate commercial consequences for the companies building in these corridors.

The long-term stakes of Afro-Arab payment integration

The long-term significance of Afro-Arab payment integration extends beyond efficiency gains for individual transactions. It represents a structural shift in how two regions with deep demographic and commercial ties manage financial sovereignty, and in how much value local actors can capture from cross-border flows rather than ceding it to external intermediaries.

Whether PAPSS and Buna converge formally, through a bilateral interoperability agreement between Afreximbank and the Arab Monetary Fund, or more gradually through shared technical standards and private-sector bridges, the direction of travel is clear. Each new corridor agreement, regulatory alignment, or commercial partnership narrows the distance between two platforms that were designed for distinct regions but increasingly serve the same flows.

For entrepreneurs, central bankers, and institutional architects building on these rails, the opportunity is real and the infrastructure is still taking shape. The actors who define the interoperability layer today will hold an outsized position in the regional payments economy for years to come.

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Africa–Gulf: The New Payment Corridors Transforming Remittances

21 September 2026 Comments (0) Business

Mobile money transfer app on smartphone, Nairobi, Kenya

For the millions of African workers employed across Gulf Cooperation Council states, the act of sending money home is a routine but costly exercise. According to the World Bank’s Remittance Prices Worldwide database, the average cost of sending 200 dollars from a Gulf country to sub-Saharan Africa has consistently exceeded 7 percent of the transaction value, more than double the 3 percent target set under the UN Sustainable Development Goals. For a domestic worker in Riyadh or a construction technician in Dubai, those fees translate directly into less money reaching a family in Nairobi, Accra, or Lagos.

That cost structure is now under sustained pressure. Over the past several years, a growing cohort of African fintech firms and Gulf-based digital payment platforms have begun constructing interoperable rails that bypass the slow, expensive correspondent banking chains which have long dominated these corridors. The result is a structurally significant reconfiguration of how Africa and the Middle East exchange value, driven not by multilateral mandate but by the commercial logic of founders and regulators on both sides of the corridor.

Mobile money meets Gulf financial modernization

Africa’s mobile money infrastructure is one of the more consequential financial developments of the past two decades. In Kenya, Tanzania, and Ghana, adult population penetration rates for mobile money wallets have surpassed 70 percent in some markets, according to the GSMA’s annual State of the Industry reports. Transaction volumes have grown at double-digit rates year-on-year across multiple markets. This domestic digitalization created an ecosystem capable of receiving international flows cheaply and near-instantly, provided the sending side could connect to it.

The Gulf has, in parallel, been modernizing its own financial infrastructure. Central banks in Saudi Arabia, the UAE, Bahrain, and Qatar have invested in real-time gross settlement systems and open banking frameworks that lower barriers for fintech entrants. Some Gulf central banks have reported more than 100 percent growth in contactless and instant transfer volumes within single-year periods. The combination of Africa’s mobile-first depth and the Gulf’s regulatory ambition creates the structural conditions for cross-border interoperability.

The operational mechanism is typically an API-based connection linking an African mobile wallet to a Gulf bank account or digital wallet. When an African fintech secures a payment license in a Gulf jurisdiction, it can offer customers the ability to load a wallet in dirhams or riyals and push funds to a mobile money account in Kenyan shillings or Ghanaian cedis within minutes. Several pan-African payment companies have pursued precisely this licensing strategy, seeking regulatory approval in the UAE and Saudi Arabia to serve large African diaspora communities. Gulf-based neobanks, meanwhile, have begun targeting African workers as a core customer segment, given the volume and regularity of their outbound transfers.

Beyond remittances: SME trade and strategic autonomy

The significance of this infrastructure extends well beyond personal remittances. African small and medium enterprises importing goods from Gulf trading hubs, particularly from Dubai’s re-export markets, have historically relied on international wire transfers that can take several days to settle and carry fees that erode already thin margins. Digital payment rails enabling near-instant settlement change the economics of cross-border trade in concrete ways. The African Development Bank has repeatedly emphasized the importance of payment efficiency in enabling intra-regional and South-South commerce, noting persistent gaps that formal banking has been slow to fill.

There is also a geopolitical dimension that analysts are beginning to discuss. Historically, remittance routes between the Gulf and Africa have run through Western correspondent banks or global money transfer operators, which have held considerable pricing power and data visibility over these flows. As African and Gulf actors build their own rails, they gain operational autonomy over fees and routing decisions. This represents a gradual diversification of the financial connective tissue linking the two regions, with African and Gulf actors exercising greater agency than before.

The Islamic Development Bank and the Arab-Africa Trade Bridges program have signaled interest in formalizing such corridors further, linking payment infrastructure to trade finance and development objectives. Regulatory coordination between Gulf and African central banks, while still at an early stage, is beginning to surface as a topic in bilateral and multilateral financial diplomacy.

A corridor still under construction

The buildout of Africa-Gulf digital payment infrastructure remains a work in progress. Regulatory fragmentation across Africa’s 54 jurisdictions means that a license secured in Nigeria does not automatically confer access in Senegal or Ethiopia. Currency volatility in several African markets adds foreign exchange risk that technology alone cannot absorb. Consumer trust in new digital products, particularly among older or less digitally literate migrant workers, requires sustained investment in agent networks and customer education.

None of these obstacles is insurmountable. The trajectory of the sector, measured in licensing milestones and expanding transaction volumes, points clearly toward continued integration. What distinguishes this moment is that the architects of these corridors are not waiting for a global institution to hand them a blueprint. African fintech founders expanding into Gulf markets, Gulf payment operators targeting African diasporas and regulators in both regions adjusting their frameworks are collectively building a financial layer that serves hundreds of millions of people in ways the legacy system never prioritized.

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